Clean water, clear expectations: Government unveils biggest overhaul in a generation

·       A new Chief Engineer to bring technical expertise to new regulator, ending days of water companies marking their own homework

·       New ‘MOT' checks on water infrastructure to stop water company assets being left to crumble and powers for regulator to intervene early where failures spotted

·       Wider rollout of smart meters and mandatory efficiency labels on items like dishwashers to bring savings of over £125 million on water and energy bills over the next decade

A new once-in-a-generation plan to overhaul the water system and protect households from disruption has been unveiled today (Tuesday 20 January). The Water White Paper sets out clear powers for the new regulator, delivering tougher oversight and stronger accountability for water companies. 

For the first time in two decades, a Chief Engineer will sit inside the new single water regulator. Their job is to bring back the hands-on checks of water infrastructure Ofwat has failed to provide, ending the days of water firms marking their own homework, resulting in crumbling pipes and unreliable services.  

The new regulator will introduce an ‘MOT' approach for water company infrastructure, requiring health checks on pipes, pumps and more. This forward-looking approach means no more waiting to act, spotting problems before they happen and preventing water shortages. 

These reforms put prevention first, requiring companies and bosses to plan for the long-term. Where companies fall short, a new Performance Improvement Regime will give the regulator the power to act fast and fix failures so that underperforming water companies recover faster, protecting customers and the environment and giving stability to investors.  

At the same time, a roll-out of smart metering and mandatory efficiency labels on items like dishwashers and washing machines will help households monitor their water use and cut costs – delivering savings of over £125 million on water and energy bills over the next decade. Building on last year's plastic wet wipes ban, the White Paper prioritises pre-pipe solutions that tackle the root causes of pollution through sustainable drainage, rainwater management, and cracking down on sewer misuse. 

Environment Secretary Emma Reynolds said: 

“These are once-in-a-generation reforms for our water system - tough oversight, real accountability, and no more excuses.  

“Water companies will have nowhere to hide from poor performance, customers will get the service they deserve, and investors will see a system built for the future. 

“This builds on the tough action we've already delivered, from record investment to banning unfair bonuses.” 

Dedicated supervisory teams for each water company will replace the current one-size-fits-all approach, giving the new single regulator a thorough understanding of how each company operates – and the ability to intervene before problems take hold.  

Stronger inspection powers, including the new regulator able to conduct ‘no notice' inspections will help prevent the kind of disruption that has affected communities across South East England in recent weeks.   

This stronger, prevention-first regulation will form part of a whole sector approach for tackling water pollution and protecting the environment. Water industry planning is currently fragmented across more than 20 different processes, which is inefficient and not cost effective. New reforms will instead bring councils, water companies, farmers, and developers together to deliver joined-up local plans to tackle river pollution, water resources and housing growth. 

Greater transparency and tough regulation set out in today's White Paper will drive forward action to protect communities, the environment and deliver value for customers:

• Over the next five years, £11 billion of water company investment will improve around 2,500 storm overflows. And nearly £5 billion is being invested in upgrades at wastewater treatment works to remove phosphorus – a key cause of nutrient pollution in the environment. This is part of a wider £60 billion programme which will help to protect 15,000km of rivers by 2050.  
• Funding for local catchment partnerships will double, empowering local groups to stop pollution before it reaches our waterways. More joined up regional water planning will reduce duplication, minimise bureaucracy and deliver better value for money. 
• The current system for dealing with customer complaints lacks teeth and too often leaves customers with nowhere to turn. A new Water Ombudsman will have legally binding powers to resolve customer complaints. This means companies will face tougher requirements to respond quickly and compensate fairly when things do go wrong, such as the shocking disruption we saw in Tunbridge Wells, and the South East in recent months.  

This builds on tough government action including introducing criminal liability for water bosses who cover up illegal sewage spills, and the power to ban unfair bonuses – blocking £4 million in bonuses last summer. 

A 2026 Transition Plan will set out the path to this new system, and a new water reform bill will bring forward the legislation needed enable the system to take effect. 

Backed by £104 billion of private investment over five years, this shift towards proactive maintenance of water company assets will fix failing infrastructure, end mismanagement, and build a water system that puts customers first – protecting household bills while attracting investment to secure the sector for the long-term.